Most Active Weekly Options: Twitter Inc (TWTR)

Instagram's milestone doesn't deter Twitter Inc option bulls

by Andrea Kramer

Published on Dec 10, 2014 at 12:33 PM
Updated on Apr 20, 2015 at 5:32 PM

The 20 stocks listed in the table below are the names that have attracted the highest weekly options volume during the past 10 trading days. Those highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest today is Twitter Inc (NYSE:TWTR), which remains popular among option bulls, despite competition heating up.

Most Active Weekly Options Table

Twitter Inc has dipped 0.1% to trade at $37.02, after Facebook Inc's (NASDAQ:FB) Instagram surpassed the microblogging site in monthly active users. Specifically, the photo-sharing platform just hit 300 million users, compared to TWTR's 284 million.

In the options arena, TWTR traders are still betting on a bounce. Calls have more than doubled puts, with roughly 45,000 of the former exchanged. The equity's 30-day at-the-money implied volatility has ramped 2.8% higher to 44.6%, reflecting a growing affinity for short-term contracts.

The stock's weekly 1/23 38-strike call is among the most active. More than 2,500 contracts have traded at the weekly strike, and it looks like most of the action is of the buy-to-open variety.

The volume-weighted average price (VWAP) of the calls is $2.08, meaning the buyers' profit will increase the higher TWTR soars north of $40.08 (strike plus VWAP) by the close on Friday, Jan. 23, when the weekly options expire. Delta on the call stands at 0.47, suggesting the options market is pricing in a roughly 1-in-2 shot of the contracts expiring in the money. Should Twitter Inc (NYSE:TWTR) shares extend their recent retreat -- the stock has swallowed a month-to-date loss of 11.3% -- the most the call buyers will lose is the initial premium paid.

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